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From cost cutting to risk management: developments in pharmaceutical logistics

14 October 2016

The rise in the costs of medicines and the increased
risks during their transportation are high factors for change in the pharmaceutical supply chain.
Logistics must therefore adapt to these constraints. How do pharmaceutical
companies and logisticians operate today? Here is an overview of the new
reality in pharmaceutical
logistics.

Transportation
of biomedicines: increasingly
stringent constraints

Medicines stemming from life sciences, or
biomedicines, are costly treatments which generally require strict temperature control
during transportation, as a result of the risks involved on their integrity in
case of exposure to temperatures which are too hot or too cold. Added to this
are increasingly restrictive regulations. As such, pharmaceutical companies
must adapt to a more complex logistical environment.

According to the American pharmaceutical magazine
Pharmaceutical Commerce, pharmaceutical
logistics via the cold chaingenerated more than $10 billion in
revenue in 2015, which should increase to $13 billion in 2019. It is
therefore a colossal challenge.

Pharmaceutical
laboratories / logistics companies: close partnerships

In an effort to control their logistical chain,
pharmaceutical companies that ship medicines stemming from life sciences did
not subcontract out their logistical operations in the past. However, the
advantages of outsourcing - reduction in costs, greater responsiveness – have
driven them to reconsider this approach so they now outsource all of their
logistics to 3PL with the aim of reducing costs and concentrating on their core
business. 3PL are increasing their ranges of services aimed at healthcare
companies.

In fact, global logistics service providers are
adapting their infrastructures to manage cold chain logistics. In June 2015, just one month
after the opening of a dedicated healthcare air-freight dispatch centre at
Amsterdam-Schiphol airport, UPS announced that it was constructing a new
healthcare distribution centre in the Netherlands to respond to the increasing
demand of the pharmaceutical sector. The facility provides temperature-controlled storage,
as well as services such as quality assurance and stock management. DHL is also
very active in cold chain logistics. Since 2012, the company has invested heavily
in facilities capable of processing shipments of heat-sensitive products.

Connected and
collaborative logistics: an essential evolution

Technology is omnipresent in the pharmaceutical logistics
landscape; whether for the purposes of serialization – use of unique numbers
and barcodes on primary, secondary and tertiary packaging of medicines to ensure
monitoring and avoid counterfeiting – or data processing with Big Data. Over
the last few years, there has been an explosion in collected data as a result
of new technologies. These data are used for the benefit of risk management and predictive analytics of logistical networks.
Big Data offers the opportunity to monitor transport
conditions and ensure the traceability
of products transported across the entire logistical chain. We are entering
an era of connected and even collaborative logistics.

The increase in pressures on costs has pushed some Big
Pharma companies into collaborating with their peers – even with direct
competitors – to reduce transportation
and distribution costs.

This was the case for the pharmaceutical laboratory
Baxter which has engaged a policy of horizontal collaboration with the Belgian
pharmaceutical manufacturer UCB since 2011. Both companies joined together to
share the logistics of six Eastern European countries. The partnership was
organized by the Belgian company Tri-Vizor, whose business is to facilitate horizontal collaboration between
organizations. This partnership allowed Baxter and UCB to achieve cost savings of
more than 15%, with a 50% reduction in the carbon footprint. In 2012, Baxter continued
its policy of collaboration with the American filtration system manufacturer
Donaldson Company Inc. to further reduce
its logistical costs. It then worked on a horizontal collaboration project
with Kimberley-Clark, a project financed by the government to demonstrate the
viability of horizontal collaborations. During the project, Baxter and
Kimberley-Clark achieved up to 10%
savings on transportation.

Sofrigam relies on the latest expertise with regard to
the pharmaceutical cold chain.
Mindful of the issues of cost and TCO maximization
of temperature-controlled logistics,
our team of engineers have developed 3 product ranges which are focused on risk management and optimization of costs.
These new ranges have been designed according to our 3M policy, an algorithmic design for our insulated packaging solutions
aiming to:

Maximize
the volume of heat-sensitive products shipped per
package

Minimize the weight of insulated containers to reduce transportation costs

Minimize
the preparation and loading time of refrigerated containers

A policy of
optimization of cold chain logistics that Sofrigam has claimed for almost
40 years, and whose best-seller, the Pallet Shipper, created in
2001, is irrefutable evidence of. Today, Sofrigam continues its international
development and is moving towards an innovative range in the area of Big Data. We
can’t tell you any more about it now, but you will have the chance to read more
about it in the next article!